February Jobs bottoming out against background of war

Friday’s Jobs report from the US Labor Dept. caused quite a shock to lawmakers, economists and investors with its loss of 92,000 jobs - a sudden departure from the rosy optimism of previous months that had seemed to show greater resilience in the employment sector, despite uncertainty across many related sectors, including the Trump tariffs, a K shaped economy, and the low-hire, low-fire mantra of many employers. All of which now seems to affect any potential rate cuts at the next Federal Open Markets Committee meeting, and any effects of the ten day old American Israeli war against Iran.

On the consumer side, gasoline, especially for America, the major focus is on the cost of crude oil which as a consequence of the war which on Monday surged to over $100 per barrel creating even more uncertainty than possible rate cuts; and, the residual effects on energy, and food supplies, not to mention its transportation are now overshadowing the February job losses.

The stock market indices were lowered, and then rose on Monday and then lowered again, giving some hope to investors, but with no predictable end in sight of the war despite reports to the contrary from the White House and the Defense Dept. who are predicting a short duration, despite a heightened level of uncertainty from many quarters.

The February highlights included a decrease in what seemed to be the iron clad area of health care, now taking a dip to 28,000 after a peak of 77,000 in January, shattering some who believed it to be a new standard for job seekers.

“Offices of physicians lost 37,000 jobs in February, primarily due to strike

activity. Hospitals added 12,000 jobs. Over the prior 12 months, health care had added an average of 36,000 jobs per month,”  reported the Bureau of Labor and Statistics.

The nurses strike in New York was emblematic of the dangers of reliance, or over reliance, on one industry, despite the pressing needs of American baby boomers, Andrew Flowers, chief economist at Appcast, said in a statement. But even accounting for that, job declines are still present and he noted. “When labor market growth depends on a sole industry, we will inevitably end up with large swings like today,” Flowers said.

Social assistance driven by individual and family needs has increased to 9,000, with a concentration of over 12,000 for the aforementioned population; and, while the report does not give detail on who is receiving what type of services, it is believed to have come from those facing a decrease in such social program cuts, and work requirements for those receiving food assistance from the Supplemental Nutrition Assistance Program, and some Medicaid cuts.

While the unemployment rate, what we prefer to call the marquee rate, nudged up slightly to 4.4 percent, inflation has increased to 2.4 percent, (still over the Federal Reserve target range of 2 percent) and wages while holding steady for higher income earners at $37.82,an increase of 0.4 percent; and while wages are up for some for others they are not for many American working families (especially those without college degrees) covering the high cost of a dwindling supply of affordable housing, a great challenge.

Wholesale inflation in January climbed to 0.5 percent with the producer price index reported by the Labor Dept. in late February, driving year over year prices from December, and in January 3.6 percent, both higher than forecasted, according to The Associated Press. Key to that were the tariffs from the president, and while many retailers and wholesalers stockpiled products before they were put in place, there were still some passed onto consumers.

With groceries still higher than consumers want, and the threat of increased prices due to the war, it’s important to note that gasoline and energy can account for 70 percent of the costs. This threat to oil exports that must travel through the Strait of Hormuz, and Iranian government threats to bomb any oil bearing cargo ships using that route are panicking wholesalers despite a statement on Tuesday by an American official that a ship was recently escorted through the straits; but, that statement was later retracted causing even more concerns in global markets.

"In February, average hourly earnings for all employees on private non farm payrolls rose by 15 cents, or 0.4 percent, to $37.32. Over the past 12 months, average hourly earnings have increased by 3.8 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees rose by 9 cents, or 0.3 percent, to $32.03."

That may not be the total picture, however and “Wage growth remained healthy, at 3.8 percent over the year. Average hourly earnings have been slowing very gradually, but remain relatively steady, suggesting that hiring is not being constrained solely by the supply of available workers,” noted The New York Times.

Looking back at year over year statistics and seeing the loss of up to 317,000 federal job losses in 2025, and for 2026 is a sobering thought: “213,000 to 260,000+ federal employees left the workforce through various voluntary and involuntary mechanisms,” according to web searches.

The Joint Economic Committee Report from Congress reported that, “Revised numbers from December show 65,000 fewer jobs from a gain of 45,000 to end with a loss of 17,000 jobs. January’s report revised down by 4,000 from a gain of 130,000 to end at 126,000. Taken together, employment in December and January was down 69,000 more than previously reported.”

Revisions for previous months are standard operating procedure for the Labor Dept, and caution should always be taken to avoid making large judgements on the basis of one month’s report; but, taking into consideration the politics of economics and President Trump’s falling poll numbers on his handling of the economy, plus the war, there is greater overall concern from many quarters on what the American economic outlook will look like in future months.

Looking at the nervousness among many observers, lawmakers and investors, plus the overall statistics and patterns, and the revisions, the Times reported: “Revisions to previous months bolstered the case that the job losses in February were consistent with a broader trend rather than a blip. Employers shed 17,000 in December, and hiring figures for January were also revised downward slightly. Taken together, job growth for the last three months effectively slowed to zero.”

When it comes to the labor pool, the decrease in immigration, commingled with the Trump administration crackdowns on immigrant labor, we are also seeing “slower growth in the supply of labor. That has made it difficult to determine if a slowdown in job growth is caused by decreasing demand for workers, fewer available job-seekers or a combination of both,” added the Times.

All in all the general view, the war excepted, reaction has been alarming, “Today’s jobs report was overwhelmingly disappointing — there’s no other way to say it,” Cory Stahle, economist for Indeed Hiring Lab, said in a statement, and reported by truckingdive.com who also added as others have observed, “Today’s data show that the labor market has averaged essentially zero net job creation over the past six months,” Stahle continued. “This is concerning because when an economy stops creating jobs, it’s often not long before it starts losing them.”

Reaction from the White House has

remained positive and has expressed optimism, with this stance: “I think it’s consistent with everything else we’re seeing, which is the economy is really strong,” Kevin Hassett, the director of the White House National Economic Council, maintained in an appearance on CNBC.

With gasoline prices surging as of Tuesday to $3.50 cents per gallon, the president and his administration are facing a tough call, and with no clear objective of the war, critics are expressing concern, even among his own party; and, while defections, Marjorie Taylor Greene excepting, are not happening yet, at least, it’s anyone’s guess what the immediate economic future will bring, but in a recent poll by PBS/NPR/Marist 56 percent of those polled oppose the war against Iran giving some indication of public sentiment.

In earlier reportage, “[But] Mr. Trump and his top aides largely shrugged off higher gas prices all week, describing the increase as just another temporary blip.

“So, if we have a little high oil prices for a little while,” the president said at one point, “as soon as this ends, those prices are going to drop.”

US Supreme Court blocks Trump tarrifs

Friday’s news from the US Supreme Court that President Trump’s use of tariffs under his use of the International Emergency Economic Powers Act was unlawful came as a shock to much of the public, but some economists say they were not surprised, while others say that position might be one of cynicism rather than reality. But, no matter how it is termed, this represents a strong push-back on what has been seen as a legislative acquiescence to the demands of Trump since he began his second term.

“We claim no special competence in matters of economics or foreign affairs,” Roberts elaborated in his 21-page written opinion. “We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that (the International Emergency Economic Powers Act) does not authorize the President to impose tariffs."

Along with immigration, tariffs have been a keystone of his administration, and also a campaign promise that the US would be very rich from them, But taken with tax cuts for the wealthy the lost revenue must be made somehow, and this was a major source of revenue, now compromised.

The blow to importers in the US that paid what is in effect a tax, was in most cases passed onto American consumers, and while some companies stockpiled products ahead of their implementation, many smaller business could not, and many families were paying more than they wanted for them and, on the back of higher grocery prices, and increasing housing costs the president has received increasingly negative poll ratings on his handling of the economy.

To no one’s surprise Trump, in less than five minutes after the 6-3 decision was announced he stated that he would still levy global tariffs. As The Hill reported, “Even so, Trump still has plenty of power to impose new tariffs to replace the old, and he is warning trading partners against celebrating with his critics.”

“Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to,” Trump wrote Monday in a post on Truth Social.”

“Trump had used the IEEPA to impose tariffs on Canada, Mexico and China soon after taking office last year, claiming those countries had not done enough to stop fentanyl trafficking into the U.S.,” the report added.

In April of last year, on the so-called Liberation Day, Trump’s announcement in the White House Rose Garden, themselves questionable in their calculation brought uncertainty not only to global markets but the aforementioned consumers, and the fallout caused the zigzag pattern of tariffs, on again, then off again, causing as much concern on Wall Street, as well as Main Street.

Now there are calls for refunds from American companies as well as politicians, and state leaders such as Illinois Gov. JB Pritzker who has called for a check to be cut for refunds to Illinoisans.

On Monday, NBC News reported that “FedEx today filed a lawsuit against the Trump administration, seeking a “full refund” of all tariffs it paid to the government under the overturned International Emergency Economic Powers Act.

“Accordingly...Plaintiffs seek for themselves a full refund from Defendants of all IEEPA duties Plaintiffs have paid to the United States,” lawyers for FedEx wrote in the lawsuit lodged at the Customs and Border Protection Agency in the United States Court of International Trade.”

Going ahead, the picture looks murky and in the same report from NBC we have “House Speaker Mike Johnson, R-La., [who] said today that the House was not likely to get on the same page when it comes to legislation on tariffs.

“We have a wide range of opinions on this topic, so I think it’d be difficult to build consensus around it, but we’ll have to see,” Johnson said.

Asked if Congress should take the lead on tariffs now that the Supreme Court has issued a ruling, Johnson said the House would “wait and see what the administration does with the executive authority” regarding tariffs.

“As I’ve said, it may take a couple weeks to sort all this out, given the Supreme Court opinion, so we’ll see,” Johnson said.

According to the Associated Press, “Trump has already signed an executive order enabling him to bypass Congress and impose a 10% tax on global imports, starting on Tuesday, the same day as his State of the Union speech.”

Taking a closer look at Trump’s next move, Yahoo Finance reported, “On Friday, he imposed a "global" tariff under Section 122 of the Trade Act of 1974. That statute allows the president to impose tariffs of up to 15% for up to 150 days to address trade deficits. After 150 days, Congress would need to approve any extension. That authority, however, has never been used to impose tariffs,” and is predicted to be a cumbersome process.

“On Monday, the US Customs and Border Protection agency said that it will stop all collections of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) as of 12:01 a.m. EST on Tuesday. The agency said in a message to shippers on its Cargo Systems Messaging Service that it will deactivate all tariff codes associated with President Trump's IEEPA-related ‌orders.”

Ratification of the US trade deals from last year with the European Union are now pending, waiting for clarification. Yahoo Finance reported, "Tariff rates on goods negotiated separately, such as steel, automobiles, pharmaceuticals, semiconductors, critical minerals, and agricultural products, aren't impacted by the Supreme Court's decision and will remain in place."

In characteristic fashion the president lashed out against those justices that voted against him, and, “calling them “fools and lap dogs” and he suggested that two he had nominated during his first term — Justices Neil M. Gorsuch and Amy Coney Barrett — were “an embarrassment to their families” because they didn’t take his side,” according to The New York Times.

While the embattled president engages in his Plan B, according to some on Capitol Hill, he faces this from the NBC/Marist polls: “As of February 2026, a NPR/PBS News/Marist poll shows a record 59% of Americans disapprove of President Trump's handling of the economy, the highest in his terms. Only 36% approve, with 56% believing his tariffs hurt the U.S. economy. Key concerns driving this sentiment include inflation, cost of living, and the potential for a recession. “

Last April the president said that his goal was to even the playing field and force foreign companies to make their products in the United States, but that goal was hardly feasible, with tariff retaliation, and the near impossibility of suddenly reformatting global supply chains, which in the best case scenario could take years, and considerable expense. And, now we see the reality of those lofty goals, failure, rebuttal from the Supreme Court, and anger from those who expected more, and got less.

“The Supreme Court just confirmed what we already know. Trump’s tariffs are illegal. He did it without the support of Congress or the voters, and you paid the price,”  Gov. Pritzker said in a short video posted on the social platform X.

He claimed Trump “illegally took $1,700 from every American family,” a figure that falls within the range cited in Yale Budget Lab research from March of last year, which projected an average household loss of between $1,600 and $2,000 due to the tariffs.

“That’s a tax on working people. Donald Trump now owes you a refund for every dollar of it. America’s working families deserve a refund. Cut the check, Donald,” Pritzker added in a report from The Hill.

Notably, they added, “The governor, who’s been floated as a possible 2028 presidential contender, demanded in an accompanying letter that the president issue refunds of that amount to more than 5.1 million households in Illinois, totaling nearly $8.7 billion.”

January Jobs are a mixed bag while CPI brightens

The January Jobs report released by the US Labor Department on Wednesday showed 130,000 non farm jobs that surprised many economists expecting a much lower rate, and while some saw it as an affirmation of the resilience of the American economy, others looking at the annual revisions found it as a mere blip in a troubling pattern for the world’s largest economy; and, central to that concern was the high rate of inflation, 2.7 percent, above the desired rate of 2 percent mandated by the Federal Reserve,

“U.S. jobs data released this morning showed signs of a rebounding labor market in January, with unemployment ticking down and a total 130,000 jobs added in January, driven mostly by hiring in the service sector,” wrote Chris Bangert-Drowns, researcher at the Washington Center for Equitable Growth, a left-leaning research nonprofit,” according to The Hill.

Taking an opposite track is Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets who said, "I am skeptical that the degree of vigor seen in these data will be consistently repeated going forward, but this release should slam the door shut on the narrative that the labor market is on the cusp of falling apart.”

Investopedia quoted Dante DeAntonio, Senior Director at Moody’s Analytics, who reiterated prior evaluations saying, "The January employment report was a mixed bag. It doubled down on the fact that the economy struggled to add jobs in 2025, while also offering a slightly more optimistic view of job growth to start 2026. ...The stronger-than-expected job growth in January does little to change our view of the labor market moving forward.

As in previous months, in 2025, health care was strong at 82,000 and social services also led at 42,000, the latter an umbrella label for social support from local and state governments as well as social workers. As has been widely reported, and as we have also noted, the aging of America’s baby boomers has increased the need for these services.

One consideration is that the lack of growth in other industries can easily keep the economy in stasis, and the weakness in other jobs is a cause for worry by some economists; and, bankers, even from the White House, who in advance of the release of the report seemed anxious; especially since President Trump has only a 40 percent approval rate with most of the negatives centering on his handling of the economy.

An important note: “The revisions also underscore how dependent the job market has become on hiring in the health care sector. Before the revisions, health care accounted for about 405,000 of the 584,000 jobs added in 2025, or nearly 70 percent of the gains. According to the latest data, health care companies added 391,000 jobs, while employment in other sectors fell by a combined 210,000 jobs.”

The New York Times reported that previous revisions were, “small and attracted relatively little attention, But the 2024 adjustment was the biggest in years, reducing estimated job growth by nearly 600,000. This year’s revisions was even bigger, the largest since 2008 in percentage terms.”

There is another cautionary note: “But the largest increase in payrolls in 13 months . . . likely exaggerates the labor market's health, as revisions showed the economy added only 181,000 jobs in 2025 instead of the previously estimated 584,000. That is a fraction of the 1.459 million jobs added in 2024, the final full year of former President Joe Biden's term,“ said Reuters.

Even more importantly we can also see that with those revisions the US is not keeping up with expected growth, and population size for the last two years and causing future uncertainty.

Trying to make sense of this mixed bag of reports and opinions is not creating easy predictions for the future, but when the Federal Reserve meets in March it is widely expected that interests will remain unchanged, and if true will not please the president.

On Friday the Labor Department released the Consumer Price Index, giving a  mild boost to the economy showing a slow down in inflation to 2,4 percent and, “The slowdown in overall inflation was cheered by the White House, with a spokesperson posting on social media that "America's economy is set to turbocharge even further through long-overdue interest rate cuts from the Fed." Americans anxious about the labor market and affordability have soured on President Donald Trump's handling of the economy,” reported Reuters.

“But just because the job market is strong doesn’t mean that there isn’t more room to cut interest rates," Fed Governor Stephen Miran told Fox Business after Wednesday's jobs numbers were released.

Bets are on that the Federal Reserve are unlikely to cut interest rates with this stranger than expected job report, and the markets did rise with the better than expected news, making Miran a possible outlier, again, when the Federal Opens Market Committee meets in March, as inflation  inches closer to the 2 percent target.

"Overall, the data suggest that price pressures remain a little too hot for comfort for the time being, but the direction of travel for inflation continues to look to be lower, even if this has proved a bumpy and slow process," said James McCann, senior economist, investment strategy at Edward Jones. "For the Fed, this probably doesn't change much in the near term."

“Miran has pushed for larger interest rate cuts since President Donald Trump appointed him to fill a vacancy at the Fed last year. He said on Wednesday before the CPI report that fewer regulatory burdens on the U.S. economy would help it produce more, which would lower prices and give the Fed the opportunity to further cut rates,” according to Investopdia.

Which brings us to prices, a constant worry for all but the wealthiest consumers who as we saw last month are largely supporting the US economy, while middle and lower consumers are feeling the pinch and holding back.

Federal Reserve Bank of San Francisco President Mary Daly in a blog post wrote “highlighted that working households don't feel optimistic these days, cautiously or otherwise, [R]ecent surveys of consumer sentiment show that people expect unemployment to rise and jobs to become more scarce over the next six months. And open positions are already pretty hard to come by, having fallen to their lowest since the pandemic in December.

Further expanding, she added, "We’ve been in a relatively low-hiring, low-firing environment for some time," Daly wrote. "That may persist, but workers are aware that things could change quickly, leaving them in a no-hiring, more-firing labor market. With inflation printing above the FOMC’s 2% goal, this rightly feels precarious."

The CPI did give some good news according to Reuters: “Eggs and coffee were also relatively cheaper last month as were fresh fruits and vegetables. The Trump administration has rolled back and cut tariffs on some imported foods. Still, food prices increased 2.9% from a year ago.

Consumers also got more relief at the pump, with gasoline prices dropping 3.2% in January from December. Though electricity prices dipped 0.1%, they surged 6.3% year-on-year, reflecting demand from data centers to power artificial intelligence.”

Affordability. The buzz word of the momentum shows more clouds, “The cost of shelter, which includes rents as well as motel and hotel rooms, increased 0.2% after surging 0.4% in December. Food prices rose 0.2% after accelerating 0.7% in the prior month. Grocery store prices climbed 0.2% as more expensive cereal and baked goods were partially offset by a 0.4% easing in the cost of beef and veal.”

Hovering in the background before the March FOMC meeting is the Personal Consumer Expenditure Price Indexes (CPE) which track consumer behavior, for example seeking cheaper alternatives be they generics, in the case of groceries, or more meals prepared at home versus dining out; and, is a key indicator for any moves from the Federal Reserve.

Of note: Wholesale inflation climbed to 0.5 percent in January, reported in late February by the US Labor Dept., and according to the Associated Press: "prices came in hotter than expected," and on a year over year basis, were led by an "increase in the wholesale prices of services, led by higher profit margins for retailers and wholesalers" with the suggestion that the Trump tariffs are being passed onto consumers.

While energy prices were down with gasoline dropping 5.5 percent from December; now, with the Israeli and American war on Iran, the price of gasoline has increased by 20 percent in the first 5 days of the aggression.

Updated March 5th 2026

Fed keeps interest rates the same frustrating Trump

Wednesday the Federal Open Markets Committee of the Federal Reserve Board, as expected, voted to keep interest rates the same from 3.5 percent to 3,75 percent citing the resilience of the United States job market among other key components, with Chair Jerome Powell saying, the economy “expanded at a solid pace last year and is coming into 2026 on a firm footing."

All of which follows a steady pattern,well established during his tenure, using established criteria of looking at the data on inflation and unemployment to meet the twinned mandate of the Federal Reserve, inflation at 2 percent, and full employment. But, despite  this traditional approach, President Trump has been not just unhappy with it, but has made disparaging remarks about Powell and his intelligence, and wants to see greater rate cuts; and, in the recent past has called for cuts as deep as 3 percent, a figure that many economists believe could lead to inflation, and possibly a recession.

The traditional independence of the Fed has been in the public eye especially since Trump’s second term, and in response to questions asked at the press conference, after the meeting, about the implications of politics in FOMC decisions, the Chair replied, “It’s just an institutional arrangement that has served the people well,” he said, “and If politics get in the way, it would create the perception that the bank would act in the interest of one group or another, rather than the broader public,” adding that, “If you lose that, first of all it would be hard to restore the credibility of the institution.”

There were two dissenters, supporting the president in wanting at least a quarter point cut, and they were Trump’s handpicked board members, Stephen Miran and Christopher Waller.

While inflation has cooled to 2.7 percent, it is still a matter of concern for the Fed but Powell said to the media, and reported by The New York Times,"We still have some tension between employment and inflation,” and noted, “but it has waned a bit. That means there’s less risk of an acceleration in inflation and also of a serious deterioration in the labor market.”

Core inflation as measured by the PCE, the Fed’s “preferred inflation measure — is just above 2 percent, stripping out tariff effects,” they added; but, “Powell said he takes a lot of solace from indications that consumers think inflation won’t be too hot either over the short or the longer term. “Expectations have been solid, and they reflect confidence in the return to 2 percent inflation,” and in an opined they reported, “If consumers start to think that prices will rise, it’s more likely they will, because workers will demand higher wage increases to compensate.”

The December 2025 Index increased on a seasonal basis to 0.3 percent, and over the last 12 months increased 2,78 percent, again seasonally adjusted, with the largest increase to 0.4 percent was for shelter and “was the largest factor in all the time's monthly increase,” in the Bureau of Labor Statistics report released last month.

Taken together there is cause for vigilance by the Fed, and of course the White House.

With eyes set on future developments Powell said, “We don’t take things off the table but it isn’t anybody’s base case right now,” in response to questions of a rate hike.

It’s been widely reported that Trump is focused on Powell’s replacement after his term empires this May, and he said on Thursday at a Cabinet meeting, "Next week ... we're going to be announcing the head of the Fed, who that will be, and it'll be a person that will, I think, do a good job."

On Friday he did just that, selecting former Federal Reserve Governor Kevin Warsh to be the next chair, and as reported by Investopedia, “Warsh, who served as a Fed governor between 2006 and 2011, beat out several finalists for the job, including Trump economic advisor Kevin Hassett and BlackRock executive Rick Rieder. Warsh will take over as Fed chair after Jerome Powell's term expires in May, assuming he is confirmed by the Senate.

"I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best," Trump wrote in a social media post Friday morning.”

Warsh, a former Morgan Stanley banker, “had long been considered one of the front-runners for the president’s nomination. And, during his tenure he became “the youngest governor in the bank’s history, and served as its liaison to Wall Street during the 2007-08 financial crisis,” according to The Hill.

Warsh needs Senate confirmation, and this is not a slam dunk, and “Republican Sens. Thom Tillis (N.C.) and Lisa Murkowski (Alaska) have vowed to oppose anyone the president nominates to the role while the Justice Department is conducting a criminal probe into the bank and Powell,

Tillis could also use his perch on the Senate Banking Committee to hinder Trump’s Fed nominees from being approved by the panel, which is a key procedural step on the way to a full Senate confirmation vote,” they added in their reportage.

In what is now apparently a full blown political tempest, “Tillis and Murkowski’s support could be critical for Warsh with Senate Democrats unlikely to give him much, if any, support. Democrats are also fuming over Trump’s attempt to fire Fed board member Lisa Cook, whose challenge to the president’s order was heard last week by the Supreme Court.”

He has “accused the Fed under Powell of using independence as a shield from accountability, and said members of the bank should “grow up” and “be tough” in the face of criticism.”

There is more than affinity for interest rate cuts and a record of critiquing the Fed under Powell, there is this: “The nominee also shares close political connections to Trump. His father-in-law, cosmetics heir Ronald Lauder, has donated millions of dollars to Trump and Republican candidates, and was reportedly behind the president’s quest to purchase Greenland.”

Some economists according to  USA Today said that Warsh may not be as docile as expected, leading us to think that in the foreseeable future, could Warsh turn out to be like Powell?